The world's largest mining company, BHP Billiton Ltd., recently purchased Houston-based Petrohawk Energy Corp. for $12.1 billion.
According to Bloomberg, Australia-based BHP's acquisition of the shale gas company is seen as a bet that demand for natural gas will increase in the U.S.
"BHP wants to increase the scale of its oil and gas business given that most of its existing energy assets are mature," said Jason Teh, who manages stocks at Investors Mutual Ltd. in Sydney. "This acquisition nearly doubles BHP’s resource base."
According to the Sydney Morning Herald, the deal could greatly increase BHP's output of oil. Currently, the company produces 500,000 barrels of oil and gas per day and that number is now poised to move higher, likely driving up the company's oil stock.
"We're [now] looking at a strong possibility of being a one-million barrel a day oil and gas company within five years,'' BHP's petroleum division chief executive Mike Yeager told analysts at a briefing.
Bloomberg reports that Petrohawk had 3.4 trillion cubic feet of reserves at the end of last year.